Content That Works : Columnist Peter Miller

COLUMN:
Real Estate Q&A

Frequency: weekly

Target audience: Real Estate classifieds sections; Home Furnishings and Home Improvement sections; professionals

Delivery method: download

Q. We are buying a new home and the lender requires a termite inspection. Since there has been no time for termites to build nests or cause damage, why do we need an inspection?

A. It may seem odd, but there is logic to the lender's request. When you look at a new home you see a finished product. However, weeks before completion, the elements making up that new home were basic materials such as pipes, wires, and wood. And that wood, sitting outdoors for an unknown amount of time, could be infested with termites or other wood-boring insects.

Is such infestation likely? No. But a home is a very large investment and it is security for the lender's very large loan. The lender does not want to see that security eaten away, thus the requirement to check for termites even for new homes.

A. Check with your closing provider, but in most jurisdictions -– if not all – the answer seems to be "no."

The purpose of closing is to assure that all requirements of the sale agreement have been met. The closing papers need to be signed by all parties to the transaction, and often notarized or witnessed.

However, the signing process need not be done at the closing table. Documents can often be reviewed and signed away from the closing table and sent to the closing provider by overnight delivery.

For specifics, speak with the closing agent as far in advance as possible so that you are aware of all options.

A. In 1976, the Department of Housing and Urban Development (HUD) began to regulate mobile homes. One benefit of such regulation is that mobile home standards have improved over time, something that makes them more attractive to lenders.

That said, a mobile home may or may not be real estate. In some states they are regarded as personal property, in other states and under certain conditions they can be considered "real estate."

When is a mobile home real estate? Some tests might include: When the home is no longer mobile; when the land beneath the home is owned by the mobile home owner; when there is a deed for the home and not merely a bill of sale; when the owner is able to provide title insurance.

A mobile home that is not defined as “real estate” is personal property, much like a car or boat. For details, speak with local brokers and lenders.

• What is the sale history for the entire property during the past year? What is the value per unit of the underlying mortgage?
• What is the voting scheme – one vote per unit or voting based on unit size?
• Is there a reserve fund for repairs? How much is now available?
• Are major repairs anticipated in the next two years? If so, how will they be funded?
• Is the co-op now facing or likely to face a lawsuit for any reason? If yes, what are the possible damages?
• What pricing trends are associated with the co-op? Are prices rising? Falling? Can you review all sales for the past year?
• Is a property tax rise known or expected?

Q. We saw a home we liked and put in a full-price offer with only one small stipulation asking the seller to re-paint a bedroom. The seller now wants us to up our bid. Isn't the seller required to accept our full-price offer?

A. You may have made a full-price bid, but you did not accept the seller's offer. The seller offered the property for sale at a given price, say $200,000. You are willing to pay $200,000 but want some minor repair work included in the deal. The catch is that an offer includes both price and terms. You have asked for a term not offered by the seller, the bedroom repairs, and -- in effect -- rejected the original offer and made a counter-offer which the sellers can now accept or reject.

Peter Miller, author of The Common-Sense Mortgage, specializes in real estate. You may e-mail questions to peter@ctwfeatures.com. Sorry, he can’t make personal replies.


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